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Nautilus Inc. Message Board

  • blooper452000 blooper452000 May 15, 2003 10:11 PM Flag

    Re: LONG-Dong Dallying !!!!

    I cash in my shares today! Locked in my profits for future buying. Looks like I will have to buy an extra hundered shares next time over what I had before. I love the smell of money.
    I sure as hell didn't sell because of the loser poster TS. I made me want to hold it longer to make even more money. Thanks TS.

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    • And in my humble opinion, you're just plain wrong. Especially since you have little idea at which price I purchased shares in each company.

    • Alusisos --
      Don't take this as criticism -- really -- but in my humble opinion you've neglected the importance of purchase price in both cases.

    • Of course I am concerned over the underlying value of the businesses I hold stock in. IE, MO, and to a lesser extent SPY (just so hard to figure, but bankruptcy is basically impossible at least).

      With NLS, it's just an issue of whether you see the current situation as undervalued or not. I don't see it as undervalued...I don't see much potential for appreciation long term, whereas I do see considerable risks. Such concerns prompted my shift of NLS equity to MO.

    • Thanks ... I looked at it a month or two ago (Natuzzi, furniture? I hope I've got the right one in my mind!)

      The financials that I found look great, but it's an italian company & I'm not sure what they have at stake when they file with our SEC. In any case I had trouble finding lots of data: I only found two or three years worth of reports I think.

    • astral_tsar, check out NTZ. Sounds to me like we look for the same features when buying.

    • Well, big A, I have to ask you: are you concerned at all about the underlying business value of your holdings?

      We all hope for heroic earnings growth (or, for antiinvestors (shorts), disastrous earnings shrinkage). But any reasonable investment plan DOES need to address *first* the case where business continues pretty much as before. Otherwise we sink to the level of the business press ... not something that -- even on the boards -- we would be proud to admit.

      In early 2002, NLS traded at around 24 times trailing earnings. Here are three possible scenarios for the future at that point:

      1. more years of hypergrowth: stock price justified (possibly even underpriced) (good)
      2. earnings level off: stock value falls 50% to 60% to 10-12 times earnings. (bad)
      3. years of 'hypershrinkage': stock value drops 75% or more (very bad)

      ONLY one scenario -- and not the most likely "middle-of-road" case -- works in favor of the purchaser at $40+. Unless you get lucky, you lose money.

      Now we contemplate buying exactly the same share one year later, at $14. We still don't know the future, but we can use the same three representative cases to get some idea of our risk:
      1. more years of hypergrowth: stock value rises to perhaps 16 times earnings: 80% or more increase in price. (very good)
      2. earnings level off: value of stock is 10-12 times earnings (about 40% to 50% rise in price) (good)
      3. years of 'hypershrinkage': value of stock drops below current price, perhaps falling 50% to the 'Hackne Line'. (bad)

      TWO scenarios -- including the baseline "business as before" case -- work in favor of the purchaser. Unless we get unlucky, we'll make money. FURTHER, we can now see these huge short positions that have forced the price down from intrinsic value through oversupply.

      Yet I still see folks claiming that buying at $40 made sense and that selling at $14 makes sense. Isn't that backward? Wouldn't it be nicer to be *buying* at the low valuations??

    • blooper452000, your post made me go 'hmmmmmmmm'.

      You sold, after cash, at about 5.5 times trailing earnings and 7.5 times forecast earnings. Average those and call it a P/E of 6.5.

      I have more cash on hand to buy even more NLS at the right price ... so thanks! ... but I'm still curious why you would be a seller at such a low price. Really feeling that you can time the market, or ...?

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